School land saga comes to an end

The Houston school board voted unanimously and without discussion Thursday to sell a desirable inner-city campus to St. Thomas High School, bringing a drawn-out and controversial bidding process to a quiet end.

The Catholic-affiliated private school offered $60 million for the 11-acre property, now the High School for Law Enforcement and Criminal Justice, at Shepherd and Memorial near Buffalo Bayou Park and downtown.

The land is adjacent to both St. Thomas and to property owned by the private development group that lost the bidding war with a final offer of just more than $49 million.

The Rev. Kevin Storey, St. Thomas president, said school leaders felt a "moral responsibility" to meet a growing demand for Catholic education in Houston and to add space for its athletic teams and a dramatic arts program.

He said alumni contributions made the higher bid possible.

"The people who were willing to support us opened up their wallets a little more than we initially hoped," Storey said. "Our alumni are passionate and enthused about this."

For Alison Malkhassian, representing the private investors, the experience was "bitter-sweet."

"We feel good that we put $20 million in the hand of the kids at HISD. I don't think it would have happened had we not been there," she said, referring to the hikes in the bids that occurred during several rounds.

But she acknowledged the bidding process was frustrating, as Houston Independent School District officials kept asking for additional rounds.

"From our perspective, we won the bid three times," Malkhassian said.

Following a successful $1.9 billion school bond election a year ago, Houston school officials decided to vacate the property and build a new law-enforcement high school using proceeds from the property sale and surplus funds from previous bonds.

After evaluating an initial group of bidders, HISD narrowed its options to St. Thomas and the private group A.V. Dickson, which owns the Bayou Park Apartments that adjoins the property. The district asked both to make another offer, and they both submitted offers above HISD's $40 million minimum.

The board threw out those bids amid charges of improper lobbying of district officials.

'Best and final' offer

In October, the private investors, now under the name E.L.K. Mountain Ltd., bested St. Thomas with an offer of just under $48 million, while the private school offered $45 million.

But HISD asked the parties to come back and submit a "best and final" offer for the campus. That's when St. Thomas far outbid the private group.

St. Thomas, which is on a 17-acre site on Memorial, has been eyeing the property. Storey said officials plan to retain the existing athletic field, gym, natatorium and main building.

"It's probably as smooth a transition from one school to another," he said. "I think this is a good thing for Houston. It allows for education to remain inside downtown."

Because of the school's religious affiliation, the land will still be exempt from property taxes.

'It's a shame'

Malkhassian, of Houston real estate firm Alara Ventures, said adding the property to the tax rolls could have put $60 million into local coffers over the next 20 years.

"As a taxpayer, I think it's a shame because taking an asset like this off the tax rolls forever is a disservice to the city of Houston," she said.

In a letter to HISD officials this summer, Malkhassian complained of representatives from St. Thomas bullying her and threatening to attack her reputation through their network of "extremely well-connected alumni."

"We are extremely disappointed, and honestly offended, by the manner in which St. Thomas has approached this process," she wrote in a letter to Gary Hansel, HISD's real estate manager in construction and facility services, and the school board.

The Chronicle obtained a copy of the letter through open-records laws.

Against God's will?

Malkhassian said in the letter it was suggested to her that standing in St. Thomas' way was against "God's will."

In an interview, she said this behavior did not continue after her initial complaints. She said she believes that letter was the basis for the inappropriate lobbying claim against her group during that round of bidding.

Storey said no one from the administration approached Malkhassian about withdrawing her bid, but he acknowledged that alumni might have contacted her.

"I'm sorry if that was painful for anyone on the receiving end," he said. "It wasn't our intent to do that, but it's a reflection of the passion and intensity of our alumni."

Board member Juliet Stipeche, who represents the law enforcement high school, texted a reporter after the vote that she is ready to begin work on a "21st century school" for those students. No location has been determined yet.

"I want the community to be fully involved in helping developed HSLECJ's new home," she wrote, "and I look forward to meeting with parents, students and community members."

Erin Mulvaney covers real estate for the Houston Chronicle's business desk. She writes breaking news and trend stories about development, growth and neighborhoods. She also covers business travel and airports. She joined the Chronicle in 2012 as a breaking news reporter, covering shootings, explosions, trials and scandals. A Beaumont native, she has a degree in journalism from the University of Texas. She previously worked in Austin and wrote about politics and policy for several publications.